With the national unemployment rate at 9.7%, there are now 14.9 million jobless American workers. This is the highest number ever recorded since the 1950s. Some American workers have been collecting unemployment payments for as long as 99 weeks.
This situation was made possible by the multiple extensions of the unemployment insurance program passed by the federal government in attempting to deal with the continuing recession. This is the longest period that American workers have ever collected unemployment payments since the program began.
According to the latest story from The Washington Post, the federal government is now spending $10 billion a month for unemployment compensation.
Millions of Americans have been forced to rely on unemployment payments for extended periods as the nation struggles through its longest period of high joblessness in a generation, and critics are taking aim, saying that the Depression-era program created as a temporary bridge for laid-off workers is turning into an expensive entitlement.
About 11.4 million out-of-work people now collect unemployment compensation, at a cost of $10 billion a month. Half of them have been receiving payments for more than six months, the usual insurance limit. But under multiple extensions enacted by the federal government in response to the downturn, workers can collect the payments for as long as 99 weeks in states with the highest unemployment rates — the longest period since the program’s inception.
The unemployed say extensions help to tide them over in unusually difficult times when jobs are hard to come by. Although unemployment held steady at 9.7 percent in February, millions of jobs have been lost in the downturn, particularly in the hardest-hit sectors including real estate, construction, manufacturing and financial services. Those jobs are unlikely to return even when the economy recovers, many experts say.
Finally, many in Congress are beginning to realize that just extending unemployment payments does not provide a real solution and can negatively affect the worker’s motivation to find a new job. Republican Senators are raising doubts on whether continuing this extension process for unemployment payments makes sense.
Sen. Jim Bunning (R-Ky.) recently single-handedly held up the latest extension, a bill to keep unemployment benefits in place for 30 more days, saying Congress should find other cuts to cover its $10 billion price tag.
Sen. Jon Kyl (R-Ariz.) did not join Bunning’s effort, but he defended his colleague’s point of view. Kyl told the Senate he questioned why anyone would see unemployment benefits as helpful to the economy, or to the job market.
“If anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work,” Kyl said. “I am sure most of them would like work and probably have tried to seek it, but you can’t argue it is a job enhancer.”
The problem, of course, is that Congress has done little to actually help the economy recover and provide the necessary tax and regulation relief to businesses and employers. The Democrats’ continuing tax, spend, and regulate cycles have worsened and prolonged the recession and failed to create the jobs. The supposed “bailouts” are proving to be a bad joke with massive spending on government growth but virtually no private sector job creation.
The results of this incompetence are quite devastating to the economy. According to Andrew Stettner, deputy director of the National Employment Law Center, there’s a good reason why people are out of work for so long:
There are six unemployed Americans for every available job, he said. “The primary reason people are out of work so long is a lack of jobs,” Stettner said.
The 14.9 million jobless Americans have been out of work an average of 29.7 weeks, just below January’s 30.2-week average. Those levels are the highest since the government began keeping those records in the 1950s, according to Stettner.
As I wrote back in August of last year, in my article The Assault on American Business:
As far as the eye can see President Obama and the Democrats are preparing to implement multiple significant tax increases, layer upon layer of new government regulations and restrictions on business activities, and massive and wasteful government borrowing and spending for at least the next decade. There is nothing coming out of this White House that would signal to American businesses that it is willing to change course and let the private sector – the only real engine of value and job creation in a free-market economy – do its job and bring our country out of this recession.
Nothing has changed since then. As a matter of facts things have gotten worse. The looming tax increases at the end of this year are still scheduled to proceed. Obama and the Democrat majority in both houses have no plans to extend the Bush tax cuts or make them permanent. They seem oblivious to the dangers ahead and are content on pushing America further into economic and financial disaster.
HT: Washington Post